Tanzania Daily News (Dar es Salaam)

21 June 2014

Tanzania: State Urged to Exploit Deep Sea Potential

Dodoma — MEMBERS of Parliament have challenged the government to exploit the revenue potential of deep sea fishing and property tax instead of concentrating on the same sources of revenue.

They said the two sources of alternative revenue that were suggested by the Parliamentary Budget Committee had great ability of earning the nation an enormous amount of money to solve budgetary constraints.

On real estate industry, they noted most of properties especially in towns and cities, and notably buildings both commercial and residential, are not contributing adequately to tax revenue.

Mr James Mbatia (Nominated) said the real estate industry had the potential to earn the nation 1tr/- annually if properly developed and exploited. He cited the National Housing Corporation as an example saying with 4 per cent in the real estate industry, the corporation was earning the country 25bn/- per annum.

The legislator said by estimates the remaining 96 per cent have the potential to generate 808bn/-. Mr Mbatia, a member of Parliamentary Committee on budget, suggested Members of Parliament should lead the way by paying property tax because they own most of the properties in urban areas.

Mr Mbatia said deep sea fishing was an area that had potential to generate enormous amount of foreign currency if it was properly tapped. He said the government lost 352bn/- in 2012 in uncollected revenue from about 300 illegal fishing vessels that were operating in the deep sea. "We only need administrative decision to pat these resources," he said.

Mrs Anne Kilango Malecela (Same East, CCM) said the government should work on the advice from the budgetary committee by generating revenue from the alternative sources in the deep sea fishing and real estate industry. "The government does not listen to our advice.

It has been using the same sources for revenue generation for years," she said, adding that the government needed to be strong on areas with high income yields.

Mr Kombo Hamis Kombo (Mgogoni, CUF) wondered why was the committee on budget formed in the first place if its recommendations were ignored.

The tax on immovable property has been characterized as probably the most unpopular among tax instruments but economists continue to emphasize the virtues of the property tax owing to its relatively low efficiency costs, impact on growth, and high score on fairness.

The Mwibara legislator Mr Kangi Lugola (CCM) said without working on the alternative sources of revenue, the 2014/15 could not be implemented.

The 2013/14 budget which ends in less than ten days to come is expected to have a 2tr/- deficit which will be carried forward to the 2014/15 budget.522

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